Brad Kelly, writing in Investors Business Daily, passes on evidence from the Federal Reserve that we are headed for bad times:
• U.S. GDP will contract this year, with the risk of "uncomfortably low" inflation. That means we’re watching for deflation, which means depression.
• The Fed’s worried about the “yawning yield spreads” between Treasuries and mortgages plus corporate bonds. While lower rates are spurring a rush to refinance, they don't guarantee that consumers can get a loan or want to buy. Tracking of previously owned home purchases, begun in 2001, has just recorded its all-time low.
• Unemployment is jumping, with Friday's payrolls report predicted to drop 475,000 jobs.
Let’s hope the December unemployment report stays under 500,000, an already too-high figure.
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